Churn quietly caps your growth. Enter your starting customers and how many you lost in the period, and this gives your churn and retention rate — the number every subscription business should watch.
Churn compounds against you. At 5% monthly churn you lose nearly half your customers over a year just to stand still; at 2% it's far gentler. That's why reducing churn is usually cheaper than acquiring new customers to replace the leak. Track it monthly, segment by cohort, and fix the reasons people leave before pouring more into acquisition.
For most SaaS, 5% monthly or below is considered healthy, and lower is better. Above 10% monthly is a red flag worth investigating.
Customers lost during a period divided by customers at the start, as a percentage. Retention is simply 100% minus churn.
Keeping a customer is usually far cheaper than winning a new one, and lower churn lets every new customer add to growth instead of plugging a leak.
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